Why Trade Forex -10 Best Reasons
Do you want to be a Forex trader? Trading the world’s currency pairs is not a gambling addiction. If you truly want to be successful at this profession, you must be prepared to invest the time and hard work to acquire the three factors for success – knowledge, experience, and emotional control.
Ten Best Reasons to Trade Forex
Forex is for consistent small profits on regular basis by being disciplined and focused.
Don’t expect a 100% win over night, do it every day and pile up the fortune step by step.
1. MOST LIQUID MARKET
Forex volumes are around $4 trillion per day with most trading concentrated in only a few currencies, there are always a lot of people trading. This makes it typically very easy to get in to and out of trades at any time, even in large sizes.
2. FOREX AROUND THE CLOCK – TRADE WHEN IT SUITS YOU
24/5 Trading begins in Sydney, Australia on Monday morning (Sunday afternoon New York time) and continues non-stop until Friday afternoon New York time
3. YOU CAN START SMALL
How much money do you need so you can start ?
It can be none – open a Demo account and start testing your strategies with fake money but with the real time quotes for the currency pairs. Micro accounts are the next best option – invest a small amount of money (it may start with $100 or €100 – it depends on the broker you choose).
4. AVAILABLE LEVERAGE – CONTROL LARGE POSITION WITH LITTLE MONEY
Use leverage to amplify small movements and make bigger profits, and that is the basis for retail forex trading. Leverage can start from 1:50 and go up to 1:400.
5. TRADE WITH LOW COSTS
Most Forex accounts trade without a commission and there are no expensive exchange fees or data licenses. The cost of trading is the spread between the buy price and the sell price, which is always displayed on your trading screen.
6. TRADE BOTH DIRECTIONS
In Forex market you can take a Long position – meaning buying the currency pair or a Short position – meaning selling the currency pair. In other words you can be a Bull or a Bear in the currency pair that you are trading.
7. TRADE FROM ANYWHERE
Can use brokers in various locations as long as you have access to a computer and internet access.
8. HIGH VOLATILITY
The daily variations for a currency pair measured in pips, can vary from a 20-30 pips and up to 200-300 pips, depending on the currency pair, the day of the week and fundamental news. When trading a pair it is good to collect information and be aware of what the daily averages are, what time of the say is the volatility increasing and what are the news related being released.
9. SIMPLER FUNDAMENTALS
There are a few major pairs to trade and follow the news of. You don’t get overwhelmed as with the tens of thousands of stocks each belonging to their own sectors and responding to that sector’s news or even worse; news that is specific to the stock or company behind the stock. There is just too much research work to outsource here since following all these different news and variables is almost impossible to one trader – if not to one machine!
In Forex, the news following gets to be much more simple and straight-forward. If you trade one pair of currencies, you need to check the most important economic news and headlines of the two countries representing the pair.
10. MORE PREDICTABLE THAN OTHER FINANCIAL INSTRUMENTS
Forex market is more predictable than stocks or commodities; it tends to follows well-established trends. However there is a high degree of volatility in Forex and depending on your trading strategy you need to balance out the long term trend and the daily volatility.